Do University-Industry Collaborations Promote Outward Foreign Direct Investments? The Moderating Effect of the Education System

University-industry collaborations have gained increasing recognition as a key indicator of innovation ecosystems in recent years. However, existing literature often overlooks the expanding and diversifying roles of universities, focusing primarily on their impact on innovation. This study seeks to address this gap by exploring the effects of university-industry collaborations on outward foreign direct investment (FDI) activities in underdeveloped and developing countries, which face significant disadvantages in terms of technological and innovative resources. Additionally, it examines the regulatory role of the quality of the education system, which is believed to influence the effectiveness of these collaborations in fostering outward FDI. Using a sample of 80 underdeveloped and developing countries, panel regression analysis was conducted on secondary data covering the years 2013-2022. The findings reveal that university-industry collaborations positively influence crossborder investments, with these effects being stronger in countries with higher levels of education expenditures. These positive effects, however, disappear in contexts where education expenditures are low. This study makes important theoretical contributions to the and developing countries, highlighting the significance of university collaborations and the education system, in contrast to firm-specific resources. It also provides valuable policy recommendations for decision-makers in these countries.